Video’s hot right now, whether you are a content creator, distribution network, broadcaster, or major service operator (MSO but also called major service providers- MSO’s or operators and in the US carriers, if you are referring to those of the wireless kind). But video, like other mediums before it, is upsetting the traditional media apple cart when it comes to online and mobile developments. Last night’s MIT Enterprise Forum’s Digital Media SIG meeting consisted of a panel discussion entitled “Internet Video Everywhere: Entrepreneurial Opportunities in Online and Mobile Video” moderated by David Ryter, featured:
- Bob Mason, CTO, of Brightcove
- Joel Olicker, CEO, of Powderhouse Productions
- John Puterbaugh, CEO, of Nellymoser
- Brian Partridge, VP of Research, Yankee Group
The discussion jumped from online to mobile, infrastructure to content, legacy content aggregators to emerging business model. So I’ll attempt to summarize some of the conversation.
Brian at Yankee Group posited the comment that video can be seen as the next killer app or the next network killer, and in the words of Cisco “the next network build out has to be paid by someone.” While there may be validity in the “killer” statement, I don’t particularly think the federal government, via the FCC, via the American taxpayer should be the underwriter of yet another build out. Yes, MSO’s (including mobile operators) take a network bandwidth hit to deliver internet content, and sit outside the revenue stream of broadcasters and content creators, but the Telco’s at least have Telco TV. Many MSO’s talk as though they’re broadcasters. Many do little to add value while serving up enormous amounts of legal requirements to content creators. The big ones are buying up broadcasters to get there though (Comcast and NBC Universal). Yankee Group and others seem to think that “all you can eat” plans have to stop and we have to move to tiered pricing. But I think America’s love affair with these plans, like the one with subsidized phones, is going to be hard to break up.
Bob Mason’s perspective over at Brightcove was that while video is big, it’s not just about media and entertainment properties. Fifty percent of Brightcove’s new business is coming from non-media sources such as small business, corporations, and government agencies looking to harness video in new ways to communicate with their clients.
John Puterbaugh at Nellymoser stated that mobile has a fragmentation problem with dozens of media formats, many operating systems, and the problem is getting better. I agree, but I do see an OS shakeout, not down to two but certainly from the seven out there now.
Joel Olicker of Powderhouse came from the broadcast side—he used to produce prime time content for Discovery Networks, TLC, Animal Planet, etc. and at Powderhouse Films is now a content creator. He has seen retrenchment from the big broadcasters because of unproven online and mobile business models. With ad supported content popular, there’s still a need to figure out what the right ad currency. Certainly not CPMs.
So the first question (from the moderator) was “where’s the opportunity and where should entrepreneurs focus?”
Brian at Yankee Group thinks it’s in mobile when LTE and WiMAX networks gain steam. When network providers work with content producers to figure out the business models for multiple platform distribution. And when they can build systems around advertising models. And also look at tier two service providers who are underserved by content creators.
Bob at Brightcove thinks its Saas and the cloud, businesses launching within Facebook to take advantage of an existing customer platform. “Don’t try to build your own business and community platform from scratch, work with an existing customer platform.”
John at Nelly Moser believes that the push by retailers to create shoppable video experiences to drive transactions is serving up some benefits. That eventually all consumer electronics devices will have connectivity, outnumbering mobile phones, as they retain their functionality but offer an opportunity for entrepreneurs to develop communications software that will work between them.
Joel at Powderhouse Films is worried about the 14 year-old with a flip camera who will produce the next hit video series that will go viral on the Web and show that everyone’s cost structure is out of whack!
The first major question from the audience was— “So where’s the market growth opportunity as big companies take video online?”
Bob at Brightcove believes that every professional will at some point want to use some form of online video, and that it is still early days. John at Nelly Moser, which is primarily focused on mobile, echo’d those remarks by saying that while mobile is driving hundreds of millions of video impressions per month; online video is driving 30 billion impressions per month, which give you some perspective of how early things are with mobile. But also that it’s growing fast.
I think there’s still an enormous amount of interest especially among smaller firms around video, and using the platform as a means to engage and retain customers. That business models are not baked, nor will they be in a year, and that experimentation with ad generated, subscription, funded, and hybrid models will continue. While the current knee jerk reaction by broadcasters is to pull content off of sites (like Comedy Central off of Hulu), consumers are savvy enough to notice when games are being played out on them.
In the next post— Consumer demand for long form video, if there’s room for more content aggregators, and the licensing mess.